IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v12y2024i10p1472-d1391333.html
   My bibliography  Save this article

A Net Present Value Analysis of Opportunity-Based Age Replacement Models in Discrete Time

Author

Listed:
  • Jing Wu

    (Gradauate School of Advanced Science and Engineering, Hiroshima University, 1-4-1 Kagamiyama, Higashihiroshima 739-8527, Japan)

  • Cunhua Qian

    (School of Economics and Management, Nanjing Tech University, Nanjing 211816, China)

  • Tadashi Dohi

    (Gradauate School of Advanced Science and Engineering, Hiroshima University, 1-4-1 Kagamiyama, Higashihiroshima 739-8527, Japan)

Abstract

Two important opportunistic age replacement models, under replacement first and last disciplines, are generalized in discrete time. The net present value (NPV) is applied to formulate the expected total costs. The priority of multiple replacement options is considered to classify the cost model with discounting into six cases. Since the NPV method accurately calculates the expected replacement costs over an infinite horizon in an unstable economic environment, we discuss some optimal opportunistic age replacement policies which minimize the expected total discounted costs over an infinite time horizon. Furthermore, we formulate a unified model under each discipline, merging six discrete time replacement models with probabilistic priority. Finally, a case study on optimal replacement first and last policies for pole air switches in a Japanese power company is presented.

Suggested Citation

  • Jing Wu & Cunhua Qian & Tadashi Dohi, 2024. "A Net Present Value Analysis of Opportunity-Based Age Replacement Models in Discrete Time," Mathematics, MDPI, vol. 12(10), pages 1-23, May.
    • Handle: RePEc:gam:jmathe:v:12:y:2024:i:10:p:1472-:d:1391333
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/12/10/1472/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/12/10/1472/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fanping Wei & Jingjing Wang & Xiaobing Ma & Li Yang & Qingan Qiu, 2023. "An Optimal Opportunistic Maintenance Planning Integrating Discrete- and Continuous-State Information," Mathematics, MDPI, vol. 11(15), pages 1-19, July.
    2. Eryilmaz, Serkan, 2021. "Revisiting discrete time age replacement policy for phase-type lifetime distributions," European Journal of Operational Research, Elsevier, vol. 295(2), pages 699-704.
    3. Menachem Berg, 1978. "General trigger‐off replacement procedures for two‐unit systems," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 25(1), pages 15-29, March.
    4. Rommert Dekker & Eric Smeitink, 1994. "Preventive maintenance at opportunities of restricted duration," Naval Research Logistics (NRL), John Wiley & Sons, vol. 41(3), pages 335-353, April.
    5. Mingchih Chen & Xufeng Zhao & Toshio Nakagawa, 2019. "Replacement policies with general models," Annals of Operations Research, Springer, vol. 277(1), pages 47-61, June.
    6. Roy Radner & Dale W. Jorgenson, 1963. "Opportunistic Replacement of a Single Part in the Presence of Several Monitored Parts," Management Science, INFORMS, vol. 10(1), pages 70-84, October.
    7. Rommert Dekker & Matthijs C. Dijkstra, 1992. "Opportunity‐based age replacement: Exponentially distributed times between opportunities," Naval Research Logistics (NRL), John Wiley & Sons, vol. 39(2), pages 175-190, March.
    8. Toshio Nakagawa, 2008. "Advanced Reliability Models and Maintenance Policies," Springer Series in Reliability Engineering, Springer, number 978-1-84800-294-4, July.
    9. Chen, C. S. & Savits, Thomas H., 1988. "A discounted cost relationship," Journal of Multivariate Analysis, Elsevier, vol. 27(1), pages 105-115, October.
    10. Nakagawa, Toshio, 1984. "A summary of discrete replacement policies," European Journal of Operational Research, Elsevier, vol. 17(3), pages 382-392, September.
    11. Sheu, Shey-Huei & Liu, Tzu-Hsin & Zhang, Zhe-George, 2019. "Extended optimal preventive replacement policies with random working cycle," Reliability Engineering and System Safety, Elsevier, vol. 188(C), pages 398-415.
    12. Toshio Nakagawa, 1984. "Optimal policy of continuous and discrete replacement with minimal repair at failure," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 31(4), pages 543-550, December.
    13. Zhao, Xufeng & Nakagawa, Toshio, 2012. "Optimization problems of replacement first or last in reliability theory," European Journal of Operational Research, Elsevier, vol. 223(1), pages 141-149.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wu, Jing & Qian, Cunhua & Dohi, Tadashi, 2024. "Optimal opportunity-based age replacement policies in discrete time," Reliability Engineering and System Safety, Elsevier, vol. 241(C).
    2. Zheng, Junjun & Okamura, Hiroyuki & Dohi, Tadashi, 2021. "Age replacement with Markovian opportunity process," Reliability Engineering and System Safety, Elsevier, vol. 216(C).
    3. Xufeng Zhao & Mingchih Chen & Toshio Nakagawa, 2022. "Periodic replacement policies with shortage and excess costs," Annals of Operations Research, Springer, vol. 311(1), pages 469-487, April.
    4. Junyuan Wang & Xufeng Zhao & Jiawei Xiang, 2024. "Optimum design and replacement policies for k-out-of-n systems with deviation time and cost," Annals of Operations Research, Springer, vol. 340(1), pages 593-617, September.
    5. Xufeng Zhao & Satoshi Mizutani & Mingchih Chen & Toshio Nakagawa, 2022. "Preventive replacement policies for parallel systems with deviation costs between replacement and failure," Annals of Operations Research, Springer, vol. 312(1), pages 533-551, May.
    6. Hashemi, M. & Asadi, M. & Zarezadeh, S., 2020. "Optimal maintenance policies for coherent systems with multi-type components," Reliability Engineering and System Safety, Elsevier, vol. 195(C).
    7. Zhao, Xufeng & Qian, Cunhua & Nakagawa, Toshio, 2013. "Optimal policies for cumulative damage models with maintenance last and first," Reliability Engineering and System Safety, Elsevier, vol. 110(C), pages 50-59.
    8. Ciriaco Valdez‐Flores & Richard M. Feldman, 1989. "A survey of preventive maintenance models for stochastically deteriorating single‐unit systems," Naval Research Logistics (NRL), John Wiley & Sons, vol. 36(4), pages 419-446, August.
    9. Sheu, Shey-Huei & Liu, Tzu-Hsin & Zhang, Zhe-George & Tsai, Hsin-Nan, 2018. "The generalized age maintenance policies with random working times," Reliability Engineering and System Safety, Elsevier, vol. 169(C), pages 503-514.
    10. Sheu, Shey-Huei & Liu, Tzu-Hsin & Sheu, Wei-Teng & Zhang, Zhe-George & Ke, Jau-Chuan, 2021. "Optimal replacement policy with replacement last under cumulative damage models," Reliability Engineering and System Safety, Elsevier, vol. 209(C).
    11. Sheu, Shey-Huei & Liu, Tzu-Hsin & Zhang, Zhe-George, 2019. "Extended optimal preventive replacement policies with random working cycle," Reliability Engineering and System Safety, Elsevier, vol. 188(C), pages 398-415.
    12. Lijun Shang & Xiguang Yu & Liying Wang & Yongjun Du, 2022. "Design of Random Warranty and Maintenance Policy: From a Perspective of the Life Cycle," Mathematics, MDPI, vol. 10(20), pages 1-22, October.
    13. Vu, Hai Canh & Do, Phuc & Fouladirad, Mitra & Grall, Antoine, 2020. "Dynamic opportunistic maintenance planning for multi-component redundant systems with various types of opportunities," Reliability Engineering and System Safety, Elsevier, vol. 198(C).
    14. Serkan Eryilmaz & Fatih Tank, 2023. "Optimal age replacement policy for discrete time parallel systems," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 31(3), pages 475-490, October.
    15. Shang, Lijun & Liu, Baoliang & Qiu, Qingan & Yang, Li & Du, Yongjun, 2023. "Designing warranty and maintenance policies for products subject to random working cycles," Reliability Engineering and System Safety, Elsevier, vol. 234(C).
    16. Shang, Lijun & Liu, Baoliang & Qiu, Qingan & Yang, Li, 2023. "Three-dimensional warranty and post-warranty maintenance of products with monitored mission cycles," Reliability Engineering and System Safety, Elsevier, vol. 239(C).
    17. Zhao, Xufeng & Al-Khalifa, Khalifa N. & Magid Hamouda, Abdel & Nakagawa, Toshio, 2017. "Age replacement models: A summary with new perspectives and methods," Reliability Engineering and System Safety, Elsevier, vol. 161(C), pages 95-105.
    18. Yongjun Du & Lijun Shang & Qingan Qiu & Li Yang, 2022. "Optimum Post-Warranty Maintenance Policies for Products with Random Working Cycles," Mathematics, MDPI, vol. 10(10), pages 1-16, May.
    19. Zhao, Xufeng & Liu, Hu-Chen & Nakagawa, Toshio, 2015. "Where does “whichever occurs first†hold for preventive maintenance modelings?," Reliability Engineering and System Safety, Elsevier, vol. 142(C), pages 203-211.
    20. Rommert Dekker & Ralph Wildeman & Frank Duyn Schouten, 1997. "A review of multi-component maintenance models with economic dependence," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 45(3), pages 411-435, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jmathe:v:12:y:2024:i:10:p:1472-:d:1391333. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.